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How many oil and gold prices affect the exchange rate?

Indian Rupee will continue to be strong in the near future?

If you're trading currencies, there is a very good reason. Many pairs of trading partners the most important currencies rise and fall of oil prices oil. The price of oil has been a leading indicator of the global economy for decades, and experts predict this will change not soon. The link between oil prices and the economies of many countries is based on a couple of simple facts: 1. Countries with healthy supplies Economic benefits of crude oil sage oil prices higher. 2. Countries that depend on imports for their energy needs benefit from lower oil prices and lose when oil prices rise. 3. When a country's economy is strong, its currency is too strong on the Forex market. 4. When the economy in a country takes a downturn, its currency is depreciating exchange rate. Oil prices fluctuated in the last year - 2005 - are a good example of what can happen when factors affecting price and supply of oil. Remember during saving basis that higher oil prices act to curb consumer spending. This is true as long as the main source of oil for industrialized countries is petroleum based. The prices of all goods produced hinges on the price of a barrel of oil. If oil prices rise, this production and prices supply for most consumer goods. In addition, consumer spending growth as individuals pay more to fuel their cars and heat their homes. The net result is a downward swing in the economy until it hits a rallying point that begins to reverse an upward trend. Experts who monitor the oil market are split on how oil prices are headed, and just how far. A little over a year, most experts agreed that $ 40 a barrel was the upper limit for a barrel of crude oil. Earlier this year, oil had already broken this point, and was sold at 42.50 dollars a barrel. The vagaries of the weather, politics World capacity to meet the actual demands have fueled one of the years the prices more volatile in recent memory. At one point, the price of Crude $ 70 a barrel, up 65% from the beginning of the year. And while prices fell for a short period, at the end of the year, they were still 45% higher than at the beginning of the year. Since the beginning of the year, prices started to rise again, and most operators believe that we will not see a reversal of this trend in the near future. The Conservative plan a price of $ 80 per barrel. More aggressive are calling for $ 100. What does this mean for the market exchange of currencies? In the market Currency exchange rates are often based on the health of a countries economy. If the economy is strong and growing, the exchange rate to reflect the fact that their currency at a higher value. If the economy is faltering, the exchange rate of their currency against most other currencies also stumbles. Knowing this result is logical: 1. The currency of countries that produce and export oil increases in value. 2. The currency of countries that import most of their oil and depend for their exports will decline in relative value. 3. The most profitable trades will involve a country that exports oil from a country depends on oil. Based on these three points, the experts are keeping an eye on the CADJPY match for the most profitable trades, and here's why. Canada has been mounted on the list of world oil producers for years and is currently the ninth largest oil exporter in the world. Since 2000, Canada was the largest supplier of oil to the United States, has considerably more attention from the market Chinese. It is expected that by 2010, imports from China needs for oil will double, and match that of the United States in 2030. Currently, Canada is well positioned to be the largest exporter of oil to China. That puts the dollar in an excellent position in a negotiation perspective. Japan, on the other hand, imports 99% of its oil. Their dependence on oil imports makes their economy especially sensitive to fluctuations oil prices. If oil prices continue to rise, the price of Japanese exports will be obliged to increase and, thus weakening their position in the global market. During the past year, there was a close correlation with rising oil prices and declines in value of the yen. Forex Definitions, Terms and Acronyms: * Nominal exchange rate - the rate at which an organization can trade the currency of a country's currency for another. * Example one currency pair 2 - If the shots include EUR / USD 1.2500 EUR / USD 1.2510, the euro is getting stronger and the weak dollar. * Exchange - a corporation or organization Mutual provides facilities for stock brokers to trade equities and other securities. If economy and history are respected, Oil prices can not continue to grow indefinitely. Eventually, consumers will bite the bullet and start cutting their demand for oil and gas. When this happens, the price of oil will either stabilize or start going back down towards $ 40 a gallon that experts predicted it Never hit. 1) Look at how a country dependent on special deals to oil dependence * of a country is very important to determine how its money will be affected by a change in oil prices. * Big energy consumers (or net importers of oil) will be more adversely affected than other countries. The fall oil prices benefit consumers in the same manner as tax reduction, while higher oil prices act like a tax increase. * For companies, higher oil prices may translate into lower profits. The countries with sources of alternative fuels, and other resources have the ability to move from strict dependence on oil sources of energy, which reduces their exposure and sensitivity. 2) Monetary Policy Responses * How responsive responsible for monetary policy of a country are on the rise in inflation is also very important in predicting response of a currency. * Countries with inflation targets may be more aggressive in the fight against inflation and adjust their policy Monetary accordingly, while others who may deal with low inflation will keep monetary policy accommodative to guard against slower growth as a result of high oil prices. * Monetary policy and interest rates are the main drivers of movements currencies. 3) Does the economy have a large oil-related market capitalization vs. industrial market capitalization Market Capitalization * Composition may also influence the price of oil affects a currency capital flows. * The currencies of countries with low energy consumption market CAP, but a high cap industrial market is more likely to be hurt by oil prices higher. * Investment flows in May be offset by lower profitability of these types of industries. * Countries with heavy industry and high levels of imports Oil will probably have the most exposure. * As you can see, the main factors to consider are growth and inflation * However, inflation is not only driven by high oil prices. In the U.S., higher prices for everything from chemicals Food and industrial products and work are hitting the U.S. economy hard. As U.S. economy spits trying to gain ground, employers are facing barriers more. * Thus, with the threat of inflation threatens, it is important to consider monetary policy reactions of the political world's central banks. A) Which currencies will most likely be negatively affected by high oil prices? * In my opinion, the U.S. dollar and Japanese yen lets look at our framework to determine why 1. Dependency on oil * The United States and Japan are two largest net importers of oil. * Soaring oil prices will have a particularly adverse effect on economic recovery in both country, threatening to block growth effectively. * Fed Chairman Alan Greenspan has already warned that the price of oil and gas could have an impact significant development in the long term the U.S. economy. * In the case of Japan, their lack of domestic energy sources and their need to import large quantities of crude oil, natural gas and other energy resources makes them particularly sensitive to changes oil prices. * Japan also lacks the flexibility to switch to nuclear energy because they are a net importer of uranium for their nuclear plants. 2. Monetary Policy * Outside of their strong dependence on foreign oil, the Federal Reserve and the Bank of Japan are also more likely to focus on growth rather than inflation. * The two countries have been struggling with very low levels on inflation and even what may be considered conditions of deflation. B) What are the currencies will likely benefit from price Higher oil? * In my opinion - The The pound and euro 1. Dependency on oil * The United Kingdom is a net exporter of oil and will benefit from higher oil prices. While oil exports are relatively small, they are not subject to the same consequences as net oil importers like the United States or Japan. * On the other hand, Germany and France, the two largest countries in the euro area are net importers oil. * Imports of crude oil from Germany, mainly from Iran have been climbing significantly since 2000. Another euro area countries which suffer from May higher oil prices is Italy. * Nearly 60% of Italy's energy comes from oil, most of which are imported. Gas accounts for another 30% of energy consumption. 2. Monetary policy * More important are the reactions of policy monetary estimates of the Bank of England and European Central Bank. * Both authorities of monetary policy are particularly concerned by inflation. And especially, what currency pairs that will benefit most? 1. GBP / JPY 2. EUR / JPY 3. EUR / USD 4. GBP / USD Hope this information helps u. .. I wish u good luck .... Happy ...!!!!! invest

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